SunPower plotting next-gen gigawatt-scale fab

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Major PV energy provider (PVEP), SunPower Corp, has revealed it is prepping plans for its next-generation ‘Fab 5’ manufacturing facility that would be on a larger scale than existing facilities.

The plant will be built as part of a major capacity expansion planned for 2015, once a new plant in the Philippines is complete.

Management had said in a conference call to discuss fourth quarter 2013 financial results that it had reeled in tool install dates for its new 350MW plant in the Philippines to the end of 2014, mainly due to a decision to install the first line that will use its existing technology platform. The facility had originally been planned to house its next major cell (Gen 3) technology upgrades for its ‘X Series’ modules.

Thomas Werner, CEO and President of Sunpower said: “The first line pair will be the existing technology, the second two line pairs will be advancements on our existing technology platform which will allow us to increase the efficiency of the product and take steps out so that we can get cost down. To think of the fab, the way we think of it is, the first two lines being one build and the second set being a new platform. And so materially we’ll get out, put out the first two lines next year and start seeing the new technology towards the end of 2015.”

Although the company had been the first major PV manufacturer to announce new-build facilities after two years of industry overcapacity, the 350MW Philippines fab represented only a small incremental increase in capacity for the company, while other competitors such as JinkoSolar and Canadian solar have already added similar capacity levels in existing facilities. Others such as Yingli Green and Renesola have both added around 1GW of outsourced capacity in the last 12 months.

Finlay Colville, Vice-President at NPD Solarbuzz told PV Tech: “The situation is harder for the SunPowers of this world, with about a 12-month lag in having any significant new capacity up and running. If things start to hot up on the capex front in the second half of 2014, SunPower’s only option would be to increase rebranding of third-party supply of lower-spec modules. Therefore, almost by default, SunPower has to be first off the blocks in announcing any new multi-gigawatt capacity for 2015 and beyond, assuming module supply is to be dominated by premium spec modules.”

The cautious fab capacity expansion, given the fact that SunPower is running current facilities at 100% utilisation and expects that to continue through 2014, means the company is capacity constrained and has limited ability to increase revenue, except by margin improvement through lower manufacturing costs and higher ASPs.

According to Colville, “As an indication of how sensitive an issue capex was in 2013, the uptick in module capacity additions by Chinese players at the end of 2013 was pretty much kept under wraps,” added Colville. “Within China, however, our analyst team was learning of Chinese equipment suppliers of module tools being sold out with multi-GW backlogs. Some of the orders got through to European tool suppliers that pushed out press releases on this quickly. So, we can say that the first part of the c-Si chain to reach the effective capacity point was for modules.”

Fab 5

However, Werner also noted in the call that plans were being drawn up for its next major expansion phase after the Philippines fab is operational in 2015.

“In terms of another fab, yes our team is looking at where we would take that new technology from those last two line pairs [in the Philippines fab] and build that in much larger scale at a fifth fab, and so yes we’re doing the work to decide where we would do the fifth fab and it would be a larger fab on that new technology,” added Werner.

Currently, SunPower’s largest facility is Fab 3 in Malaysia with a nameplate capacity of over 1GW, though curiously the company has yet to install and ramp that facility to full capacity with JV partner, AU Optronics Corp.

SunPower’s Fab 5 could therefore easily be at the gigawatt-scale and above as the company continues to focus on next-generation solar cell technology and the need to drive manufacturing costs down for the technology to be cost competitive.

The move by SunPower to consider its next major capacity expansion and capital expenditure phase could spark a wave of competitors in China to announce similar plans.

“With no obvious next-generation c-Si technology available to choose from – and in fact no PV technology roadmap being used – the next round of new capacity is more likely to benefit from economy-of-scale issues, rather than new technology buys,” noted Colville.

“But the days of gigawatt market leaders limping through adding a couple of hundred megawatts here and there will also be things of the past soon. Multi-gigawatt fabs from the Chinese c-Si leaders are likely to emerge as soon as they get over the stigma associated with announcing long-term spending on fab capacity. And, of course, assuming the climate in China for its PV leaders to be seen to get access to the capital required is deemed acceptable both inside and outside of China.”

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